Car sales in Latvia this year have shrunk to a fifth of year-ago levels according to a local dealer body.

The sharp decline reflects a much weakened local economy and the continued impact of a credit squeeze.

The Latvian Authorised Car Dealers Association says that passenger car sales in the first four months of the year totalled 1,636 units – 80% down on the same period last year.

Volkswagen was the market leader – with 265 units registered. Toyota ranked second with 186 new car registrations.